Scudooda Pty Ltd v K&E Property Pty Ltd [2018] NSWSC 1397

Scudooda Pty Ltd v K&E Property Pty Ltd [2018] NSWSC 1397

The plaintiff validly exercised the option to renew and the defendant was bound by the plaintiff's equitable interest, so the December 2016 holding-over termination notice was ineffective. However, properly construed, neither cl 30 nor cl 66 of the lease imposed any obligation on the lessor to pay for electricity supplied to the demised premises. The plaintiff therefore had no right to reimbursement or set-off for electricity charges and was not justified in withholding rent. Its prolonged non-payment of rent breached essential terms of the renewed lease and amounted to repudiation, disentitling it to specific performance and entitling the defendant to terminate the occupation, recover...

Jurisdiction
Australia
Judgment Date
11 September 2018
Procedural Posture
Equity Proceedings Concerning a Retail Lease, Specific Performance, Rent Arrears, Mesne Profits and Possession / Principal Judgment After Hearing
Outcome
The plaintiff's claims were not made out. The Amended Statement of Claim was to be dismissed. The defendant/cross-claimant was entitled to judgment for possession of the premises and monetary judgments for unpaid rent, interest and mesne profits calculated in accordance with the reasons.
Legal Topics
['option to Renew Lease' 'registered Lease and Unregistered Renewed Lease' 'purchaser of Freehold Bound by Leasehold Interest' 'personal Equity Against Purchaser' 'construction of Lease Obligations for Electricity Charges' 'non Payment of Rent' 'repudiation of Lease' 'possession' 'arrears of Rent and Mesne Profits' 'rectification']
['land Law' 'equity' 'leases' 'contract Construction'] ['option to Renew Lease' 'registered Lease and Unregistered Renewed Lease' 'purchaser of Freehold Bound by Leasehold Interest' 'personal Equity Against Purchaser' 'construction of Lease Obligations for Electricity Charges' 'non Payment of Rent' 'repudiation of Lease' 'possession' 'arrears of Rent and Mesne Profits' 'rectification']

Case Brief

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Procedural Posture

Equity Proceedings Concerning a Retail Lease, Specific Performance, Rent Arrears, Mesne Profits and Possession / Principal Judgment After Hearing

Legal Issues

  1. 1 ['Whether the plaintiff validly exercised the first option to renew the registered lease.' "Whether the defendant, as purchaser and registered proprietor of the freehold, was bound by the plaintiff's equitable interest arising from exercise of the option to renew." 'Whether the lease or renewed lease required the lessor to pay for electricity supplied to the premises or reimburse the plaintiff for electricity charges.' 'Whether the plaintiff was entitled to withhold rent or set off electricity payments against rent.' "Whether non-payment of rent entitled the defendant to terminate the plaintiff's occupation and recover possession." 'Whether the lease should be rectified to replace "excluding" with "including" in cl 30.1.']

Ratio Decidendi

The plaintiff validly exercised the option to renew and the defendant was bound by the plaintiff's equitable interest, so the December 2016 holding-over termination notice was ineffective. However, properly construed, neither cl 30 nor cl 66 of the lease imposed any obligation on the lessor to pay for electricity supplied to the demised premises. The plaintiff therefore had no right to reimbursement or set-off for electricity charges and was not justified in withholding rent. Its prolonged non-payment of rent breached essential terms of the renewed lease and amounted to repudiation, disentitling it to specific performance and entitling the defendant to terminate the occupation, recover...

Court Disposition

The plaintiff's claims were not made out. The Amended Statement of Claim was to be dismissed. The defendant/cross-claimant was entitled to judgment for possession of the premises and monetary judgments for unpaid rent, interest and mesne profits calculated in accordance with the reasons.

Orders

  • ['The Amended Statement of Claim should be dismissed.' 'Judgment for possession of the premises should be given to the defendant on its Cross-Claim.' 'Judgment should be entered on the Cross-Claim for unpaid rent and interest up to 12 February 2018 and mesne profits from 13 February 2018 to judgment, calculated on...